Why do interpolated grease pencil strokes deform?
The Interpolate Frames feature is used to transform a stroke from one shape into another, but not really to move a stroke from one place to another whilst maintaining its shape. That's because it draws an imaginary straight line from each of the stroke point's old position to its new position, then makes the point travel along that straight line. For a simple move and/or scale that works, but when rotating a stroke the points should follows an arc, not a straight line, so the shape ends up being squashed by the half way point. You can add a frame at the half-way point, but the problem will happen again on either sides because it's still two straight lines instead of a curve.
For this kind of transformation, instead of interpolating frames you should look into cut-out animation techniques which moves the different parts without changing their shape.